Home Remodeling Expected to Post Strong Year

Home Remodeling Expected to Post Strong Year

Daily Real Estate News |
Friday, January 17, 2014

Home remodeling is projected to continue the strong growth it started in the second quarter of 2013 into the first half of 2014, according to LIRA, the Leading Indicator of Remodeling Activity, at Harvard University’s Joint Center for Housing Studies.

Double-digit gains in spending are expected through the first half of this year with remodeling. In the third quarter, however, growth is expected to level off to just under 10 percent, LIRA projects.

"The ongoing growth that we've seen in home prices, housing starts, and existing home sales is also being reflected in home improvement activity," says Eric S. Belsky, managing director of the Joint Center. "As owners gain more confidence in the housing market, they are likely to undertake home improvements that they have deferred."

Still, the strong growth in the remodeling market may start to recede around mid-year, says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "By that time, we'll be approaching the pre-recessionary levels of spending, and with borrowing costs starting to creep back up, growth rates are likely to slow some,” Baker notes.